Australia deals blow to CK Asset takeover of gas pipeline operator APA GroupBusiness | 7 Nov 2018 3:29 pm
CK Group’s A$13 billion (US$9.4 billion) bid for gas pipeline operator APA Group was knocked back by Australia’s government on national security concerns, a decision that has the potential to further inflame diplomatic tensions with China.
"I have advised the consortium led by CK Asset Holdings Ltd. of my preliminary view that its proposed acquisition of APA Group would be contrary to the national interest,” Treasurer Josh Frydenberg said in a statement today, Bloomberg reports.
His view was based on concerns it would lead to an undue concentration of foreign ownership by a single company group in one of the countries most significant gas transmission businesses. Frydenberg said he would make a final decision within two weeks.
Louise Watson, an external spokeswoman for APA Group, was not immediately able to comment when contacted after the Treasurer’s announcement. CK representatives weren’t immediately available to comment.
CK Group’s cash offer was split among subsidiaries CK Asset Holdings Ltd., CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. It was cleared in September by the competition regulator, after the conglomerate agreed to sell natural gas pipeline and storage infrastructure assets in Western Australia to appease anti-trust concerns.
The Australian Financial Review cited a CK Group spokesman as saying: "The CK Group notes the specific reference in today's announcement that the Treasurer's preliminary view reflects the size and significance of the APA Group, which is by far the largest gas transmission system owner in Australia; and that the preliminary view is not an adverse reflection on the CK Group, and also that the Australian government welcomes CK Group's investments in Australia and its broader contribution to the Australian economy."